Q. Why can’t I just use Medicaid or the VA and keep all my money?
A. Medicaid provides government-paid health benefits for the poor. If you have all your money, you’re not poor. Similarly, the VA Pension program, which provides help for wartime veterans and their surviving spouses, also provides benefits for the poor (though recipients need not be as poor as for Medicaid.) There are legal ways, though, to keep some of your money in the family and still become poor enough to qualify for Medicaid or for VA Pension for long term care.
Q. Why can’t I just give my money to my kids or grandkids and then go on Medicaid or VA benefits?
A. Money given away is viewed by the Medicaid agency and by the VA as an attempt to avoid paying your fair share of your own costs of care. Medicaid looks back five years, and VA looks back three years, to see if applicants have given any money away. As I wrote above, there are legal ways to keep some of your money in the family and still qualify for Medicaid or VA benefits. Please note that it says SOME of your money. If you haven’t pre-planned (more than five years ago,) you probably won’t be able to keep all of your money in the family. Also, just because the ways to keep money in the family are legal certainly does not make them easy.
Q. How do you get around the look-back periods?
A. The five-year Medicaid look-back period and the three-year VA look-back period (mentioned above) are something you worry about if you’re trying to pre-plan how to protect your life savings from long term care costs long before you expect to need long term care. When I work with clients who need care now or in the near future, I emphasize to them, as I wrote above, that some, but not all, of their life savings can be kept in the family. If you haven’t pre-planned, and done it very well, it will be extremely difficult to protect all of your assets if you need long term care now.
Q. I do my taxes by myself. Why can’t I get Medicaid or VA Pension by myself?
A. Taxes are an annual (or even more frequent) event for Americans, so we are used to them. They are routine. In addition, tax forms come with instructions. Needing long term care is not a routine event in your life. Protecting your life savings from those costs is a one-time thing. There aren’t any second chances. In addition, there are no instruction manuals explaining how to keep some of your life savings in the family and still qualify for Medicaid or VA Pension. As I like to say, the Medicaid and VA systems aren’t logical, they’re political.
Q. Why will Medicaid take my house?
A. The Medicaid fund is, bit by bit, losing money. Medicaid can’t stop paying for care. That would be breaking the law. What Medicaid does instead is look for ways to get some of their payouts back. Medicaid has what they call “estate recovery.” When a Medicaid patient passes away and his or her spouse has also passed away, Medicaid tries to get what the couple left behind to help rebuild the Medicaid fund. The easiest asset to pursue is the house because it requires nothing more than filing a lien.
Remember, though, that Medicaid can’t take the house as long as the Medicaid recipient’s spouse is living in it. In addition, there are strategies that sometimes can help your family keep the house or keep a good portion of the financial value of the house.
(For now, at least, the VA doesn’t count your house as an asset, even if you’re not in it, but VA does count any land exceeding two acres.)
This information is provided to further the mission
of The Koewler Law Firm
“Protecting Seniors and People with Special Needs.”
For help with long term care, with deciding how to deal with chronic illnesses,
or with planning for someone with special needs,
call Jim, or contact him through this website.